Four Takeaways from Business Pros to Stay on Top
Keep these “rules” in mind when creating your strategic plan.
In the article, What Makes a Company Future-Ready?, from Harvard Business Review, the authors investigated multiple industries and discussed processes, ideologies and policies within companies that have adapted and thrived versus those that have not performed as well. Some of those lessons can easily be applied to accounting firms, according to Donny Shimamoto, CPA, CITP, CGMA, the founder and managing director of Intraprise Technologies. Shimamoto summarized the lessons in his blog post for CPA Trendlines.
Article Insight 1: Don’t Play the Zero-Sum Game with Disruptors
Looking at the fintech industry, the researchers noted despite Apple Pay and Google Pay coming in to disrupt the physical card market, MasterCard and Visa invested in a wide range of APIs that made their products more accessible to third-party developers (including Apple and Google), broadening their usage without them having to do the work themselves. Compare this to American Express, which kept its payment infrastructure closed and tried to do everything in-house. The article concludes by advising readers to always be ready to explore new possibilities.
Shimamoto applies this to the accounting industry in the following way:
“We’ve got technology-driven bookkeeping services, like Bench and QuickBooks Live, that are commoditizing bookkeeping and creating fully digital experiences for clients. Learning from American Express, we know that accounting firms can’t develop their own bookkeeping automation technologies and compete with these types of companies that have a ton of venture capital or Wall Street investments behind them. Instead, firms should be looking at technologies that also automate commoditized areas, like tax compliance and bookkeeping, and integrate them into their services offices…Firms should be embracing these hybrid vendors that combine technology and services to offload lower-end (and non-client-facing) work, so that your firm’s team can focus on the analysis of the resulting data and more advisory services.”
Article Insight 2: Utilize High Learning and High Certainty Decision-Making
In the HBR article, researchers explain how Nike uses data analytics and a hybrid physical store, as well as app-integrated experiences to increase forecasting accuracy. Shimamoto notes that accountants are usually worried about always getting things right and need to embrace the possibility of sometimes getting it wrong, as there will still be lessons. He states, “We need to develop reasonable hypotheses and then test these hypotheses and fail fast so we can learn, update our hypotheses, and then try the experiment again.” He goes on to advise developing hypotheses during post-busy season debriefs and then use engagements over the summer to test new tools and techniques.
Article Insight 3: Agility and Speed Trump Size
The HBR researchers credit Jeff Bezos with advising, “Knowing how to make decisions quickly is essential to surviving in a fast-paced industry,” and called the decisions two-way doors: decisions that you could back out of later if you didn’t like the direction.
Shimamoto advises, “Embrace decision frameworks that enable action,” stating:
“This may sound a lot like the experimental mindset described earlier, but I think there are two other things to consider here: (1) Be wary of analysis paralysis and (2) Commit to action. One trap I see firms get stuck in is “forever trials.” This is where a firm does a trial of a software (i.e., it runs an experiment), but it never takes the steps to address issues found or drive broader mainstream adoption. This doesn’t only happen with technology; I’ve also seen this with business practices like value pricing.”
He continues, “Because of the cyclical nature of our work, if you don’t enact change by fall, you practically have to wait another year to enact the change again…Recognize that there will be problems when you roll things out at scale. Experiment and do trials to try and stop the catastrophes, then roll out the initiatives with the right resources and support in place to deal with issue that arise. Action trumps inaction.”
Article Insight 4: Silo Thinking Limits Innovation
The HBR researchers examined the automotive industry and recognized that most managers were “unaccustomed to exploration and experimentation,” and advised, “Worry less about keeping up and more about finding a new viewpoint.”
Shimamoto said accountants need to embrace diversity of perspective to drive holistic solutions, explaining, “Many people and associations are talking about the threat to our profession as more non-accountants are hired by accounting firms. I believe this to be a good thing because as we deal with more complex problems, we need cross-disciplinary perspectives to develop better holistic solutions. Too often I see accountants get stuck in silo thinking or I see partner-level people worry more about looking like they don’t know everything rather than considering the advice or perspectives of other professionals like IT, HR and marketing.”
He continued, “With the increased visibility of environmental social and governance (ESG) reporting, our profession will need to embrace the experience of other professionals to be able to adequately assess risk, determine the right standards for reporting, and ensure that the interest of the public is upheld by those providing these reports. So, we need to embrace other disciplines – not just internally, but also as part of our service delivery.”
Shimamoto concludes by advising readers to follow the lessons revealed in the HBR report and apply them to their accounting work to not only always be future-ready, but to also remain relevant.